How much is protecting tobacco worth to state?

Though we believe that raising taxes should always be a last resort, a guest column, “Using smokes and mirrors to resolve Georgia budget woes,” by Frank Stephenson (Rome News-Tribune, Feb. 4) contains inaccuracies and fails to fully examine what is at stake this year with Georgia’s budget and health-care system. In fact, perhaps the question isn’t really if we want to increase the tax on tobacco, the question is, who and what are we willing to sacrifice in order to protect tobacco in Georgia, which already has the 46th lowest tobacco tax in the country.

For perspective, let’s consider that the seriousness of the deficit in the state budget has already led to teacher furloughs, the prospect of releasing some prisoners early, increasing class sizes, potentially slashing two weeks off the end of the school year and a legislative proposal to tax hospitals. Would we really tax hospitals before we would tax tobacco? Perhaps more troubling is that even after these massive cuts, Georgia is still facing a budget hole of almost $l billion this year, and double or triple that in the next fiscal year which begins this July. The Commissioner of the Department of Community Health recently testified that without “new revenue,” the state would also be forced to slash reimbursement for Medicaid providers by another 16.5 percent, on top of the 6 percent cut already incurred. As doctors, we can tell you that this would devastate Georgia’s health-care infrastructure statewide. Many providers-would no longer not be able to afford to see Medicaid patients, who in turn would likely show up at the very hospitals that are set to be taxed in lieu of tobacco.

Also contrary to the authors claim, most any economist will also tell you that a tobacco tax is one of the most reliable and predictable sources of revenue out there. It is more predictable than sales taxes, income taxes or property taxes. In fact, 46 states have raised their tobacco tax rate since 2002 and in each and every case, revenue has gone up and tobacco use has gone down.

A revenue estimate generated by the governor’s office last year indicated that even after accounting for cross border sales, internet sales and smoking declines, a $1 dollar tobacco tax increase would generate at least $350 million per year — an estimate that many regard as extremely conservative. This effect has already been proven in Georgia. When we last increased our tobacco tax from 12 cents per pack to 37 cents per pack, our annual revenue from tobacco jumped from $79 million to $226 million per year — despite people quitting smoking and the so called internet and cross border sales losses.

Most importantly though, when tobacco use declines, so do cancer rates, youth smoking rates, heart attacks and a host of other debilitating health conditions. As doctors, that is what we care about most. It makes you wonder why Georgia would be so interested in protecting tobacco. We hope that our fellow doctors and community members join us in asking our state legislators to not sacrifice schools, good health-care, public safety, students and others, just so that we can have the cheapest cigarettes in the country.


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